Four Documents Every Business Needs

Four Documents Every Business Needs - Pathmaker BlogAfter a career that included working with companies of all sizes from start-ups to industry icons, I have learned that there are four vital documents that every business needs.

The problem is that far too many do not have them. The bigger issue is that not having them invariably leads to failure.

One: A Mission Statement

It only takes a few sentences to establish for yourself, your employees and your clients your raison d’etre. I have witnessed business owners struggle for day and weeks trying to define their mission. That worries me. If you can’t state your mission, what are you doing in business? No mission = no purpose. No written Mission Statement = no vision. “Where there is no vision, the people perish.”

Two: A Policy Manual

A Policy Manual states the principles upon which your business operates. You might say that it is a compilation of the ethical and moral things you will or will not do to accomplish your mission.

A Policy Manual may deal with a wide range of matters from integrity to sustainability. For instance, you may say, “We will respect every individual and we will value their ideas.”

Simply put, a Policy Manual is the system of beliefs upon which you will run your business.

Three: A Current Business Plan

Your Mission Statement and Policy Manual should rarely, if ever, change. Your Business Plan must. I am writing this during the weekend of the 2015 NCAA basketball Sweet Sixteen. Each team has a clear mission and policies according to which they live and play. But they have a different plan for every game.

A company Business Plan defines where you plan to go and how you plan to get there, within the context of your Mission Statement and Policy Manual. As the game changes, so must your plan.

A Business Plan should include an analysis of all the factors that affect the business. It should include clearly-defined, achievable objectives, be reviewed at least annually, and revised as necessary based on the review.

Four: A Procedure Manual

No business can operate successfully for very long using a “fly-by-the-seat-of-your-pants” approach. Every process needs to be controlled. That control is your defined procedures. It is critical that every employee knows and understands your procedures. The best companies audit their procedures from time-to-time to ensure that employees are complying with them. A Procedure Manual is an absolute must for ensuring consistency, accuracy and quality.

A Procedure Manual on its own will have no meaning to employees unless they know and ascribe to your Mission Statement, your Policy Manual, and your Business Plan. Most problems occur at the lower levels of the company when the people do not understand the big picture.

Conclusion

I said earlier that “not having them invariably leads to failure.” I did not say that having them will ensure your success, but having them will go a long way to helping your business succeed. Many small business owners feel no need to create and follow these documents, because it seems like a waste of time. Let’s put it this way, many people who have no teeth once thought it was a waste of time to brush them. I think you get the point.

Sacrificing the Permanent on the Altar of the Immediate

Sacrificing the Permanent on the Altar of the Immediate - Pathmaker BlogLife is about choices – the decisions that we must make in response to circumstances and people around us.

One of our major problems is our failure to think about our choices with a long-term perspective. This often causes unintended consequences for ourselves and foists those consequences on others as well. We need to develop a mindset that understands that every decision we make has both immediate and long-term consequences. That mindset is determining to “Never sacrifice the permanent on the altar of the immediate.”

A decision to disobey a direct order thousands of years ago caused permanent damage to the entire human race. “It’s just a piece of fruit. What could possibly go wrong?”

A decision “see how fast this baby can go” has put many a young man in a wheelchair – and created a burden for his family – for the rest of their collective lives.

A decision to “try” drugs has landed tens of thousands of people in poverty, desperation, jail or a grave.

One decision in favor of the immediate. Results that last a lifetime.

How You Make Decisions Can Affect Your Business’ Success

The executive staff was engaged in a major strategy session in which the life of the company was on the line, when one person proposed a counter-intuitive tactic. The idea created a stir in the boardroom, with some for and some against, but it met with an immediate dismissal by the CEO as a stupid idea.

The next day, the CEO called a special meeting of those who had been at the aforementioned one. This time he put the tactic back on the table. He said, “I spent a long time last night thinking about what would happen if we do this.” He paused judiciously. He continued, “Then I spent the same amount of time thinking about what would happy if we don’t.”

“Having thought it through, I still believe that we will take a hit short-term if we do it. On the other hand, I believe that it is the only path that ensures long-term success. The path we had previously espoused would give us the euphoria of short-term success, but ultimately would have been a nail in our coffin.”

The Right Kind of Decisions Come From the Right Kind of Decision Making

The CEO had done it. He had recognized that they were about to sacrifice the permanent on the altar of the immediate. When he did, he changed the course of the company’s future from failure to success. The only way he could have made the right decision was to take the right approach and consider the more permanent effects more valuable than the immediate effects.

You will make better decisions, more often, that have better results in the long run, if you determine to count the cost of sacrificing the permanent on the altar of the immediate – and commit to never doing it.

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It ain’t the Size of the Dog in the Fight…

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Rat Race

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